August market rout hits pension funding
Reprints
Fueled by losses in the equity markets, the funded status of pension plans sponsored by large employers fell in August, according to a Mercer L.L.C. analysis released Tuesday.
On average, pension plans sponsored by companies in the S&P 1500 were 81% funded as of Aug. 31, down from 83% as of July 31, but still significantly higher compared with the end of January, when the plans were 74% funded, on average.
“While the decline for the month was only 2%, August was a very bumpy ride for plan sponsors,” Matt McDaniel, a partner in Mercer's retirement business in Philadelphia, said in a statement.
“Turmoil in equity markets stemming from concerns in China led to a decrease in funded status of more than 5% through Aug 24. Fortunately, a partial recovery, combined with a rise in discount rates late in the month, allowed pension plans to recover much of the loss,” Mr. McDaniel added.
In the aggregate, the Mercer analysis found that the plans' funding deficit rose by $44 billion in August to $423 billion.
In all, the plans, at the end of August had $1.775 trillion in assets and $2.197 trillion in liabilities.
Read Next
-
PBGC hit with $322 million loss in plan takeover
The Pension Benefit Guaranty Corp. said Monday it is taking over and terminating an underfunded pension plan sponsored by Standard Register Co., a Dayton, Ohio-based printing and marketing communication firm.
